World equity markets began November with a broad rally yesterday after a brutal October, boosted by strong corporate earnings and signs that a trade war between economic giants, China and the US, could be contained.
The MSCI All-Country World Index, which tracks stock markets in 47 countries, climbed about 0.7 per cent. October was the index's worst month since May 2012 as it lost 7.5 per cent when equity market took a beating from factors such as trade wars and concerns over world growth and higher US interest rates.
Investor sentiment was bolstered by remarks from US President Donald Trump, who said he had a "very good" talk with Chinese President Xi Jinping on trade and North Korea, and that the two planned to meet at an upcoming G-20 summit.
“Over the past few days, we’ve seen the pressure valve taken off the selling which certainly helps from a sentiment perspective,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
The Dow Jones Industrial Average rose 193.2 points, or 0.77 percent, to 25,308.96, the S&P 500 gained 19.53 points, or 0.72 percent, to 2,731.27 and the Nasdaq Composite added 68.63 points, or 0.94 per cent, to 7,374.53.
The pan-European STOXX 600 index rose 0.18 per cent.
Sterling extended its rally yesterday after the Bank of England kept interest rates on hold and hinted at a slightly quicker pace of future rate rises if Britain's exit from the European Union goes smoothly.
Sterling's rally nudged the US dollar off its recent peak. The dollar index, tracking the greenback against six major currencies, fell 0.8 per cent, with the euro up 0.83 per cent to $1.1404.
The index had spiked to a 16-month high of 97.20 overnight on an ADP national employment report showing US private sector payrolls increased by the most in eight months in October.
The dollar has enjoyed a boost from robust data, including last week's gross domestic product growth numbers which showed the US economy slowed less than expected in the third quarter.
"We've got a reasonably risk-friendly market, and with the new month we have some dollar selling," said Kit Juckes, a strategist at Societe Generale.
Benchmark 10-year notes last rose 4/32 in price to yield 3.1455 per cent, from 3.159 per cent late on Wednesday.
Oil prices retreated, touching their lowest levels since June, due to rising concerns over weaker global demand and increased supply from the world's major oil producers.
US crude fell 0.89 per cent to $64.73 per barrel and Brent was last at $74.36, down 0.91 per cent on the day.